Should I Borrow Money against My Lawsuit?

Should I Borrow Money against My Lawsuit?

You can borrow money against your accident case at any time after your accident, even before a lawsuit is filed.

It can be a good idea when you desperately need money to pay rent, a mortgage payment or maybe even a car payment. But, the interest rate is substantial.

Money you receive from a lawsuit funding company is not a loan! It’s a cash advance of your settlement but you do not have to pay the money back if your case is not successful.

Since it’s not a loan, lawsuit funding companies charge interest rates which would normally be usurious, typically 3%-4% per month, which equals 36%-48% annually.

As a general rule, you will probably pay back 2-5 times the amount you borrow. We can usually obtain lawsuit financing for our clients at 2.5% monthly interest but even that is expensive.

Before you sign the final papers to borrow money against your settlement, be sure to review the payback schedule that the lawsuit funding company provides you. The payback schedule will show you the amount you will have to pay back at different dates.

To compare lawsuit funding companies, look at the following:

  • Monthly interest rate
  • Interest rate period – This refers to the period of time the interest will be charged. For instance, if your loan is paid back 12 months and one day after you receive the money, you may have to pay 18 or 24 months of interest.
  • Compounding – is interest compounded monthly, biannually or annually.

If you have a question to submit for an article, a question about insurance or would just like to say hello, please call Phil Franckel at 1-800-HURT-911 or send your question to Phil@HURT911.com

Philip L. Franckel Esq. and Rob Plevy, Esq. are attorneys with FRANCKEL & PLEVY, LLP representing people hurt in motorcycle and other accidents.  Disclaimer: This article should be considered advertising to represent people HURT in an accident; is for informational purposes and should not be relied upon because it could contain errors; the correct information may be different for your set of facts even though they seem similar; and is not legal advice which should only be obtained by contacting Phil Franckel, Esq. or Rob Plevy, Esq. for a free consultation to discuss your specific circumstances at 1-800-HURT-911.

See our web sites NYSeriousInjuryAttorneys.com, NYMotorcycleAttorneys.com and LIMotorcycleAttorneys.com.  If you have been hurt in a motorcycle accident, speak directly to Phil Franckel 24/7 at 1-800-HURT-911 — 1-800-487-8911.